Advisor will arrange for the execution of securities transactions for the Account through brokers or dealers that Advisor reasonably believes will provide best execution. In selecting a broker or dealer, Advisor may consider, among other things, the broker or dealer’s execution capabilities, reputation, and access to the markets for the securities being traded. Advisor generally will seek competitive commission rates but will not necessarily attempt to obtain the lowest possible commission for transactions for the Account.
As a general matter, Advisor considers it appropriate to use the execution services of Charles Schwab & Co., Inc. for the purchase and sale of securities for managed client accounts, unless there are restrictions such as customer designation or legal requirements to the contrary. Advisor reserves the right, however, to utilize other broker- dealers that provide prompt and reliable execution at favorable security prices and reasonable commission rates. The best net price, giving effect to brokerage commissions and other costs, is an important factor in this decision, but a number of other judgmental facts are important as well. These include knowledge of negotiated commission rates currently available; the nature of the security being traded; the size and complexity of the transaction; the desired timing of the trade; the activity existing and expected in the market for the particular securities; confidentiality; and the execution; clearance and settlement capabilities and other relevant and appropriate services of the broker or dealer.
Transactions for each client account generally will be effected independently, unless Advisor decides to purchase or sell the same securities for several clients at approximately the same time. Advisor may (but is not obligated to) combine or “batch” such orders to obtain best execution, to negotiate more favorable commission rates or to allocate equitably among Advisor’s clients differences in prices and commissions or other transaction costs that might have been obtained had such orders been placed independently. Under this procedure, transactions will be averaged as to price and transaction costs and will be allocated among Advisor’s clients in proportion to the purchase and sale orders placed for each client account on any given day.
Instead of allowing Advisor to select brokers or dealers for the Account, Client may direct Advisor in writing to use a particular broker or dealer to execute all transactions for Client’s Account. In that case, Client will negotiate terms and arrangements for the Account with that broker or dealer, and Advisor will not seek better execution services or prices from other broker or dealers or be able to “batch” Client transactions for execution through other brokers or dealers with orders for other accounts managed by Advisor. As a result, Client may pay higher commissions or other transaction costs or greater spreads, or receive less favorable net prices, on transactions for the Account than would otherwise be the case.
Client authorizes and directs Advisor to instruct all brokers and dealers executing orders for Client to forward confirmations of those transactions to Custodian (as defined below) and Advisor. If Client wishes, Advisor will instruct the brokers and dealers that execute orders for Client’s Account to send Client all transaction confirmation, and Client’s monthly statements from the Custodian and the statements Advisor provides, to keep informed of the status of Client’s Account.
Advisor may give a copy of this Agreement to any broker, dealer or other party to a transaction for the Account, or the Custodian (as defined below) as evidence of Advisor’s authority to act for Client.